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Tesco Prelims

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idpickering
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Tesco Prelims

#404082

Postby idpickering » April 14th, 2021, 7:12 am


Financial highlights

· Group like-for-like sales growth10 +6.3% including UK +7.7%

· Total retail operating profit before exceptional items and amortisation of acquired intangibles4 £1,990m, down (14.7)%

- UK & ROI operating profit £1,866m - after £(892)m UK COVID-19 costs (incl. third UK colleague bonus announced today)
and after forgoing £535m business rates relief

- represents 11.4% growth year-on-year prior to forgoing business rates relief

- Central Europe operating profit £124m, impacted by COVID-19 trading restrictions and Hungarian retail sales tax

· Bank operating loss £(175)m, in line with guidance; £(295)m goodwill impairment driven mainly by increased discount rate

· Retail free cash flow £1,187m; down year-on-year reflecting lower retail profit and last year's £277m sale of Gain Land

· Net debt down £0.3bn to £(12.0)bn; Total indebtedness down £1.9bn to £(13.0)bn (TIR: 3.6x, impacted by COVID-19)

· Diluted adjusted EPS6 11.94p down (35.8)% reflecting lower profits

· Proposed final dividend of 5.95pps to take full year dividend to 9.15pps - in line with last year and an exception to our policy, reflecting the importance the Board places on dividends paid to shareholders and its confidence in future cash flows

And later this;

Dividend:

In February, we returned £5.0 billion to shareholders by means of a special dividend, following the sale of our businesses in Thailand and Malaysia.

We propose to pay a final dividend of 5.95 pence per ordinary share, taking the full-year dividend to 9.15 pence per ordinary share, including the payment of an interim dividend of 3.20 pence per ordinary share in November 2020. The proposed full-year dividend of 9.15p reflects the importance the Board places on dividends paid to shareholders, the strength, resilience and momentum of the business in a particularly challenging year and our confidence in future cash flows. This is an exception to our policy of a pay-out ratio of 50% of earnings which would have implied a full year dividend of 5.97p.

The proposed final dividend was approved by the Board of Directors on 13 April 2021 and is subject to the approval of shareholders at this year's Annual General Meeting. The final dividend will be paid on 2 July 2021 to shareholders who are on the register of members at close of business on 21 May 2021 (the Record Date). Shareholders may elect to reinvest their dividend in the Dividend Reinvestment Plan (DRIP). The last date for receipt of DRIP elections and revocations will be 11 June 2021.


https://www.investegate.co.uk/tesco-plc ... 00093719V/

Tesco are a more recent buy for me as of a year ago, and I now consider them a mainstay in my HYP. My scheduled top up of my TSCO later this month still stands.

Ian.

nb, The above is part one of the results. Part 2 here; https://www.investegate.co.uk/tesco-plc ... 00203720V/

Arborbridge
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Re: Tesco Prelims

#404403

Postby Arborbridge » April 15th, 2021, 8:39 am

Held dividend, but this July is down on last year - so in effect they have rearranged the deckchairs on the Titanic.

The bluster about the special dividend seems to be just that, for all I had was some of my capital given back involuntarily. Still don't understand how that was supposed to be an advantage or why Tesco seem to chalk it up as some sort of success for shareholders. Special sleight of hand, not special dividend.


Arb

idpickering
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Re: Tesco Prelims

#404439

Postby idpickering » April 15th, 2021, 10:53 am

Arborbridge wrote:Held dividend, but this July is down on last year - so in effect they have rearranged the deckchairs on the Titanic.

The bluster about the special dividend seems to be just that, for all I had was some of my capital given back involuntarily. Still don't understand how that was supposed to be an advantage or why Tesco seem to chalk it up as some sort of success for shareholders. Special sleight of hand, not special dividend.


Arb


Thanks for your input Arb. I tend to agree with you. Also, I’m glad you posted as it seemed like this board was in its’ death throws. Cue tumbleweed....tbh, I’d just about given up bothering to come here.

I still intend topping up my TSCO holdings on 22nd of this month.

Ian.

Gengulphus
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Re: Tesco Prelims

#404441

Postby Gengulphus » April 15th, 2021, 11:01 am

Arborbridge wrote:Held dividend, but this July is down on last year - so in effect they have rearranged the deckchairs on the Titanic.

The bluster about the special dividend seems to be just that, for all I had was some of my capital given back involuntarily. Still don't understand how that was supposed to be an advantage or why Tesco seem to chalk it up as some sort of success for shareholders. Special sleight of hand, not special dividend.

Well, there are two ways that it might be viewed as some sort of success for shareholders:

* If they've managed to sell the businesses they've disposed of at a good profit over what they've invested in them, then distributing that profit to shareholders is clearly some sort of success for them. Of course, given that such a profit generally indicates that they were good businesses to be invested in, that does raise the question of whether they could have produced a better sort of success for shareholders by hanging on to them - i.e. of whether it's a 'glass half full' type of success when a 'glass entirely full' type was available.

* If they've disposed of the businesses at a loss or a mediocre profit, indicating that they haven't been worthwhile investments for the company, then it might be viewed as a success compared with hanging on to them and continuing to make losses or mediocre profits from them - i.e. 'glass half empty' when the alternative is 'glass fully empty' can be viewed as some type of success, albeit a pretty poor type!

Not currently being invested in the company, I lack the motivation to even try to analyse Tesco's accounts to see what I can glean about whether there's credible basis for claims of either of those types of success. But that's basically what one needs to do to have a firm basis for criticising the company's decision to dispose of the businesses.

Gengulphus

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Re: Tesco Prelims

#404454

Postby Gengulphus » April 15th, 2021, 11:41 am

idpickering wrote:Also, I’m glad you posted as it seemed like this board was in its’ death throws. Cue tumbleweed....tbh, I’d just about given up bothering to come here.

A seasonal effect, I suspect. In particular, the first 2-3 weeks of each calendar quarter tend to have very few company results announced, because most big companies align their financial years with calendar quarters. So in the first 2-3 weeks of a calendar quarter, it's rather too early to expect results from financial periods that ended in the just-completed quarter, and the vast majority of results from financial periods that ended in the quarter before that are already out.

Of course, there are always some exceptions to such rules of thumb, and Tesco with its financial years that end around the end of February is one of them. But such exceptions are quite few and far between. So there's generally going to be a bit of a lull in HYP Practical threads prompted by company results around the start of each calendar quarter, and such threads are a big enough part of HYP Practical discussions that that means a noticeable lull in overall HYP Practical traffic.

Also, just at the moment the great outdoors beckons... Or in my case rather more than just beckons - it's high time I got the lawnmower out again!

Gengulphus

idpickering
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Re: Tesco Prelims

#404470

Postby idpickering » April 15th, 2021, 12:31 pm

Gengulphus wrote:
idpickering wrote:Also, I’m glad you posted as it seemed like this board was in its’ death throws. Cue tumbleweed....tbh, I’d just about given up bothering to come here.

A seasonal effect, I suspect. In particular, the first 2-3 weeks of each calendar quarter tend to have very few company results announced, because most big companies align their financial years with calendar quarters. So in the first 2-3 weeks of a calendar quarter, it's rather too early to expect results from financial periods that ended in the just-completed quarter, and the vast majority of results from financial periods that ended in the quarter before that are already out.

Of course, there are always some exceptions to such rules of thumb, and Tesco with its financial years that end around the end of February is one of them. But such exceptions are quite few and far between. So there's generally going to be a bit of a lull in HYP Practical threads prompted by company results around the start of each calendar quarter, and such threads are a big enough part of HYP Practical discussions that that means a noticeable lull in overall HYP Practical traffic.

Also, just at the moment the great outdoors beckons... Or in my case rather more than just beckons - it's high time I got the lawnmower out again!

Gengulphus


Thanks for your thoughtful, and well reasoned post Gengulphus. I shall stag on hereabouts I guess. As for the garden, I spend most of my time gardening, the fickle Orkney weather permitting.

Ian.


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